AirSculpt Technologies, Inc.

Good morning and welcome to AirSculpt Technologies' third quarter 2021 earnings conference call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Dennis Dean, Chief Financial Officer at AirSculpt Technologies. Thank you. You may begin.

Good morning, everyone, and thanks for joining us to discuss AirSculpt Technologies' third quarter 2021 results. Joining me on the call today is our founder and chief executive officer, Dr. Aaron Rollins, and Ron Velhoff, our chief operating officer. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth. Risk and uncertainties that may impact these statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we file with the SEC, all of which can be found on our website at investors.elitebodysculpture.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information, such as adjusted EBITDA and adjusted EBITDA margins. We use non-GAAP measures in some of our financial discussion as we believe they more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recently quarterly report when filed, which will also be available on our website. With that, I'll turn the call over to Dr. Aaron Rollins. Aaron.

Thank you, Dennis. Good morning, and thank you all for joining on our first earnings call as a public company. Our IPO was a very exciting achievement for us, but it was just one step in a long journey. We had an exceptional quarter, but before we discuss our results, I want to share some remarks about the company for those who aren't as familiar with AirSculpt. We are an experienced, fast-growing national provider of body contouring procedures. We operate under the brand Elite Body Sculpture, and we deliver a premium consumer experience in a luxurious spa-like atmosphere for a custom body contouring using our proprietary AirSkull procedure. Our network of specialty centers focuses on the removal of unwanted fat and simultaneously achieves exceptional skin tightening for our patients. We offer fat transfer procedures, which allows patients to transfer their unwanted fat to other areas of their body. I developed AirSkull over 10 years ago because I saw it. great need to deliver the highest quality results in body contouring and to provide patients a luxurious first-class experience. Unlike traditional liposuction, which uses a scraping or a shearing technique, AirSculpt uses a cannula that moves 1,000 times per minute in a back-and-forth corkscrew motion to remove live fat cells one by one, all while simultaneously tightening skin. We do this through a freckle-sized hole instead of using a scalpel incision. Moreover, we perform this procedure while our patients are fully awake and in a minimally invasive fashion. We use no needle, no scalpel, and no stitches, and it's all done awake. There's no general anesthesia. Our average patient can resume normal activities the very next day, and patients see results immediately. AirSculpt is covered under two utility patents, which we directly own. They relate to proprietary processes of performing fat removal, and the combination of multiple components to perform proprietary systems that are specifically configured for carrying out air sculpt procedures. We believe the systems and methodologies claimed in our patents provide impressive results with less patient trauma relative to other systems and methods of fat removal. We further rely on copyright, trademark, and trade secret laws to protect our brands, proprietary technologies, know-how, data, and copyrighted content, which includes our library of before and after photographs. We have a gallery of well over 200,000 before and after pictures of satisfied patients, which we believe to be the largest in the world. No matter what type of problem someone may have, our gallery allows them to see patients we have helped with similar body concerns as theirs. While Airscope speaks to our innovation in body contouring, it doesn't stop there. In 2020, we began broadcasting AirScope TV, which takes you live inside an AirScope procedure to see patients having procedures performed. Additionally, we allow the online audience to ask questions of the patients while they are undergoing their procedure. We believe this to be a first of its kind, and it again speaks to our innovation in every aspect of the business. We have now grown our footprint to 18 centers in 14 states, as we recently announced our newest centers in Miami Beach, Florida, and Salt Lake City, Utah. This expansion demonstrates our ability to execute on our de novo strategy of opening three to four centers each year and speaks to the demand in the U.S. for our dramatic body contouring services only available with AirScope. We also believe there is a great opportunity in the future to expand our network of centers internationally. We would like to emphasize that we feel that AirScope provides the absolute best results in body contouring. Not only are they incredibly dramatic compared to competitors, but the experience is far less invasive and the skin tightening is incredible. All of these factors lead us to believe that we provide the best body contouring that currently exists, period. Our industry-leading results should not be overlooked. We strongly encourage you to compare our results to any other technology or methodologies. Moreover, we sell these results to our patients, not to physicians or to hospitals. We sell our services to patients that want the absolute best in-body contouring and at what we believe is a very fair price. Finally, before we begin to discuss our results for the quarter, I wanted to provide a quick update regarding COVID. By now, I'm sure everyone is aware of the new Omicron variant. To date, we have not experienced any negative impacts in our centers. While we cannot speculate on how this new variant might impact our country or how certain government bodies might respond. What we can say is we continue to monitor the situation and we'll follow appropriate measures to address it, just as we have to previous variant outbreaks, such as the Delta variant. Now, I want to turn the call over to Ron Delhoff, our Chief Operating Officer. Ron?

Thank you, Dr. Rollins, and good morning, everyone. I'm going to focus my remarks today on providing a few highlights for the third quarter and then share with you some color on our business model and our attractive unit economics. We had an exceptional quarter, and we continue to be encouraged by our strong top line revenue of $34.7 million, a growth of 94.3% over the prior year quarter. Our growth continues to be driven by strong volumes and revenue per case expansions. Our total case volume increased 60.4% over the prior year quarter, of which 29.9% was from the same centers, and our revenue per case for the quarter was $12,632, a 21.1% increase over the prior year quarter. We continue to be encouraged by our rate increases, which is the result of patients desiring to have more areas performed at one time as well as continued demand for our services. Our third quarter adjusted EBITDA increased to $12.1 million reflecting a 127% growth over the prior year quarter and our adjusted EBITDA margins have expanded to 35% compared to 29.9% in the prior year quarter. Our advertising costs, which include our digital, social, and traditional advertising was 4.3 million for the quarter, which is approximately 12.3% of our revenue. When combined with our marketing and sales personnel costs, our total customer acquisition costs for the quarter was approximately 6 million or approximately $2,100 per customer. We expect our marketing costs as a percentage of revenue to move up and down from quarter to quarter. related to timing of investments and we make compared to the related revenue expansion which we achieve from these investments. I'm now going to comment a bit regarding our business model for those that may not be as familiar with our business. Our centers have an extremely attractive unit economic profile. As Dr. Rollins mentioned, we now have 18 centers across the United States. We have a modest upfront investment in our centers, which typically is less than $1 million, which includes construction and equipment. Historically, our centers become cash flow positive in approximately three months and generate 100% return on invested capital in approximately one year. We are 100% private pay with zero reimbursement risk, and for patients that request it, we assist them with securing third-party financing at no recourse to us patient financing allows us to schedule procedures more quickly, and approximately 44% of our patients utilize a financing option during the quarter. We anticipate opening three to four centers each year, and now that Miami and Salt Lake City have opened, that brings our total for 2021 to four de novos. We will also be increasing the number of procedure rooms at certain locations. All our legacy centers were built as single procedure room centers, and due to capacity constraints, we are converting those to multiple procedure room centers. So far, we have converted three centers and have plans to convert the remaining four during 2022. Adding the procedure rooms will not only give us additional capacity, but also allow us to increase the speed, efficiency of treating our patients. With that, I'll turn it back over to Dennis to provide additional details on our financial results and outlook. Dennis?

Thanks, Ron. Since this is our first earnings call as a public company, I want to provide a framework of our key performance metrics and how we evaluate the business. The key metrics we will report outside of the core financial statement metrics are cases, revenue per case, number of centers, and number of procedure rooms. And we'll report these both total and on the same center basis. Now I'll go into our financial performance for the third quarter and then provide some comments regarding our four-year estimates. Revenue for the quarter increased $16.8 million to $34.7 million, a 94% increase from the prior year quarter. And our cases increased 60% to 2,743. The increase is the result of adding three new de novo centers, which expanded our footprint from 13 centers to 16 centers and our number of procedure rooms from 21 to 27 as of September 30th, 2021. Our revenue per case was 12,632, a 21% increase from the prior year quarter. We also had favorable revenue metrics on a same center basis. Same center revenue increased 56% over the prior year quarter. primarily driven by case growth of approximately 30%. Much of our same store growth can be attributed to addition of virtual consultations and an increase in our social media and marketing capabilities, such as AirSculpt TV, to drive further brand awareness and to attract more patients into our existing centers. We continue to see increases in our revenue per case, which we attribute to patients becoming more informed and having more areas treated at one time. There are several variables that determine our pricing. Primarily is based on the amount of time a patient is in the procedure room, which can vary due to a number of areas being treated, the volume of fat being removed, and also fat transfers. For the quarter, fat transfers continue to make up greater than 20% of our procedures performed. From an earnings perspective, our adjusted EBITDA for the quarter increased $6.8 million to $12.1 million, an increase of 127% over the prior year quarter. The increase is due to the additional de novo centers we added and our same center revenue increases and adjusted EBITDA margin expansion to 35% for the quarter as compared to approximately 30% from the prior year quarter. Our margin expansion was primarily related to cost of services due to our ability to leverage certain fixed costs such as rent in our facilities as well as improved efficiencies with our clinical staff. Moving on to liquidity and cash flow items. We have a very strong balance sheet Our cash position was $20.7 million, and we have a $5 million revolver that is undrawn and has no outstanding letters of credit as of September 30, 2021. Our long-term debt was approximately $83 million, and our leverage ratio at the end of the quarter, as calculated under our credit agreement, was 1.69 times. Operating cash flow for the quarter was $8.5 million. An attractive aspect of our business model is that we are 100% self-pay. We have no reimbursement risk. We receive all of our payments up front, so we have no accounts receivable to collect. Additionally, our surgeons are contracted and receive payment only after a surgery is performed, which allows us to manage our operating cash flow very effectively. From an investment standpoint, we invested $1.6 million during the quarter, primarily related to opening our de novo centers in Salt Lake City and Miami Beach, Florida. As you know, we completed our IPO on October 28th, and it closed on November 2nd. We received net proceeds of 13.5 million after deducting underwriter fees and related offering expenses. Additionally, we incurred approximately 12.6 million of other expenses related to the IPO, which included terminating our sponsor management agreement, advisory fees, debt amendment fees, and IPO-related bonuses. Now I'll provide some information on expectations for the upcoming quarter. As we think about revenue, We expect to achieve approximately $35 million in revenue for the fourth quarter, which will be a 53% increase over the prior year quarter. And we expect approximately $10 million in adjusted EBITDA, which would equate to an adjusted EBITDA margin of 28.5%. Our adjusted EBITDA guidance reflects an increase in our corporate G&A related to additional legal, accounting, insurance, investor relations, and other costs that we will incur as a public company. We also anticipate an increase in marketing-related costs related to our new center openings as we continue to increase our brand awareness and drive additional volume into our centers. While these costs will impact our margins in the near term, we expect margins to return to the mid-30s as a percent in the mid-term. As a result of our IPO, we reorganized into a C corporation and will be estimating taxes accordingly. and expect our effective income tax rate to be approximately 25%. Additionally, our stock-based compensation will increase related to our IPO equity grants issued as part of the creation of our 2021 stock incentive plan. These initial IPO related grants have a three-year vesting period and are expected to impact net income significantly over the next three years. As Dr. Rollins and Ron discussed in their comments, we have a very strong business model. from the results of our patients received from AirSculpt to the financial results we demonstrated during the quarter. We expect to continue to capitalize on the strengths of our technology and operations, as well as our attractive business model, which is fueled by favorable trends in the aesthetic space. We are currently in the process of evaluating our full 2022 expectations, which will include investments in opening three to four new centers, expanding our remaining single procedure room facilities, and focusing on innovations to our existing technology, as well as expanding our marketing efforts for greater brand awareness. With that, I'd like to turn the call over to the operator for a few questions. Operator?

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.

Hey, good morning, everyone, and welcome. My first question is on underlying case volume growth. We're tracking it on a sequential basis, and it looks like it's steady at a very strong rate throughout this year. Curious why it shouldn't accelerate as the marketing takes hold and as well as center growth starts to ramp up. And I know you're not speaking to next year yet, but underlying like that assumption directionally, shouldn't we see some acceleration in it?

Yeah, it's a great question. One of the things I would point your attention to when you look at it from a sequential standpoint is we tend to see a little bit of seasonality in the second quarter. The second quarter tends to be our strongest quarter. And so when you're kind of comparing second quarter to third, third tends to be our lighter quarter. So you're getting a little bit of noise there as it relates to the seasonality aspect of it. Some of that seasonality rolls over into the first part of the fourth quarter, and then we begin to kind of ramp back up. at year end and then going into the first part of the next year. So I think what you're seeing there a little bit is the seasonality aspect of it.

And maybe as a follow-up, can you speak to the penetration rate of add-on services? I know we talked about Ticket being influenced by it, but will you provide that? Maybe you did, and I apologize if you have, but what was the penetration and how does it compare to prior quarters?

If you're thinking of it from a standpoint of fat transfers, we were still very much in a similar place at just over 20% of our volume in fat transfers. But I would point your attention to that our core business is fat removal. And you can't do a fat transfer without, obviously, fat removal. And so we're very confident and we're excited about our fat transfer percentage of our business. But again, our core business is fat removal. And what we're seeing is more and more patients are getting more and more areas in one visit. And again, we attribute that to really, quite frankly, educating the patient. Our sales team does an excellent job of educating what the possibilities. And also, as you know, as we've shared, we started AirSculpt TV last year. And it really has been a catalyst for us to be able to, you know, share with our patients, educate our patients of what the possibilities are. And so they're coming in and having more and more areas of their body addressed in one visit.

Thank you. Happy holidays. Good luck. Take care.

Thank you.

Thank you. Our next question comes from the line, F. Whitmayer with SVB Learing. Please proceed with your question.

Hey, thanks. Good morning. Ron, I think in your prepared remarks you mentioned that I think three to four centers are going to be adding new procedure rooms. Can you confirm that? I can't remember if I got my numbers right here. Just any details on the timing of those openings and can you continue to operate while adding this new capacity? Do you need to reduce capacity to add additional capacity or any of these relocations that we should consider?

Sure. Great question. Yes, Our existing four legacy centers are all going to be underway. Actually, two of them will be relocations, so there will be absolutely no disruption to business, and we'll just be able, like we did in Sacramento, we'll be able to just seamlessly move into our new location. The other one, we're able to stage it where we will not have any distribution issues, Disruption, excuse me, as well. And the fourth one, the same there. So we feel really good about our execution of not only adding multiple procedure rooms to our existing legacy centers, but in addition to our de novo plan of adding three to four centers next year.

Yeah, any help on the timing for when you would expect those new procedure rooms to come online?

Sure. As you know, it's hard to say, and it moves around a bit, just depending on where we are in terms of construction and certificate of occupancies. But again, we'll have a better idea for you a little bit later on the actual four and when they're going to go ahead and come up.

Okay. My other question, maybe for... for Ron or Dr. Rollins. I'd be curious just to hear a little bit more about just the social media and marketing strategy, just how your internal team is organized, how you guys prioritize and target local national campaigns, how air sculpting sort of works behind the scenes. It might be helpful to hear a little bit more about just the engine that you guys have from a marketing and advertising and social media standpoint. Thanks.

Sure, I'll take that. It's Aaron Rollins. The last few years, the allocation of marketing dollars has significantly improved. And we've become a lot more efficient with those dollars and gotten a higher ROI out of them. And we think there is more opportunity to further leverage going forward. One of the ways we want to do that is besides social media, which we're doing quite a good job of, is getting, like you said, into the celebrity and influencers and diving into that more. It's something I'm really, really looking forward to because I know how effective it is from our past history. It's been an incredible driver for our business. As I always like to say, I think that we've barely, barely scratched the surface of our TAM. And awareness is everything right now. Just that what we do is actually possible, even to people that are kind of into the plastic surgery scene. Many of them are, you know, very surprised to find out that we're capable of doing what we do and get the results that we get. So it's really, we're going to be continuing to do what we have been, but what we're going to do is add

awareness marketing and that's a lot of that is through PR but other forms of advertising as well okay thanks a lot thank you ladies and gentlemen as a reminder if you'd like to join the question queue please press star 1 on your telephone keypad our next question comes from line of Peter Keith with Piper Sandler please proceed with your question hi this is Karine on for Peter thanks for taking the question and congrats on a quarter on the good quarter

So can you first touch a bit on your pricing strategy here moving forward? With average procedure revenue seemingly increasing double digits, is that a good run rate going forward? And what are the drivers of that? Is that solely just people adding on more parts of their body, or are you also going to be taking pricing with that?

Thank you very much. It's Aaron Rollins. I'll go into that with you. So first, what I'd like to say is we've made an initiative to offer better price transparency. We find that the number one question people ask us once they see our results is, how much? So we're doing a much better job of efficiently giving them ballpark pricing, and that's a big deal. We plan on keeping our price for now about the same that it is right now. We strongly feel that our price is fair. We could increase the price. There's really nothing stopping us from doing that. We're really not seeing a lot of price, any downward pressure. What we are seeing and what I expect to continue to see, and I think it's because of our success in social media, especially with Aeroscope TV, is really the people who are getting one area done, like just their chin or just their arms or just their waist, are getting more areas done, and that's a trend that is very strong, and I see it continuing. So because they're seeing, geez, this person's getting their love handles and tummy and chin done, and now I'm not afraid because I just watched someone do it live, I'm going to do all those things and just get it over with, and I know I won't have to miss work, so it's no big deal. And that's a big change, actually, over the last few years. That's really what I see in terms of that. And as for other economic factors, we don't believe a modest change in the inflation rates or interest rates would affect volumes given the patients that we target. So again, we're really, our price point is very fair and it's comparable to other forms of body contouring and I hope that people understand that that any comparable form of body contouring, we're right kind of in the sweet spot there.

And, Corrine, I would add that, you know, as we move into next year, you know, kind of your question as it relates to kind of how do we look at that on a go-forward basis, it's obviously going to be part of our 2022 plan that we're, you know, very much, you know, in the process of building out. But, again, as Dr. Robbins says, you know, we have had a lot of success in getting people to do more areas. So, you know, at some point there will be, you know, some, you know, we wouldn't expect, you know, 25% type, you know, per case growth or for revenue per case growth. But we're obviously focused heavily on educating, you know, existing patients on what we can do.

Great, thank you. That's incredibly helpful. And then just one more on our end. With the new facilities you're adding next year, is there any color you can provide on the cadence of that and when we should start to see those facilities coming online throughout next year?

Go ahead, Ron. No, it's okay. I'll take it. I'll take it. Sorry, we're in different locations this morning. Yeah, we're obviously, again, like I said, we're in the process of building out our plan for 2022. What we can say is we feel that we have a high level of confidence to be able to achieve the overall plan of getting three to four centers opened next year. But the cadence of it, again, will be part of our overall plan for next year.

Thank you.

And we'll provide that, obviously, in, you know, late February, early March of next year.

Thank you. Our next question comes from the line of Parker Snur with Raymond James. Please proceed with your question.

Hey, how's it going, everybody? Thanks for taking the question. So when you look at the new center ramps, how much EBITDA contribution do you get maybe in the first quarter? kind of second quarter and then kind of looking out, like kind of lay out the ramp up in the new facilities and how they contribute to the bottom line there?

Sure. So, you know, as we look at our, you know, facilities coming online, you know, our business model gives us really a very attractive return here. And, you know, it typically takes us about three to four months to get to a profitability point. So the first three to four months from an EBITDA perspective, we're at a point of right at break even. And due to our unit economics, we usually achieve a full return of invested capital in approximately 12 months. And I think Ron said in his comments that it usually costs us somewhere in the neighborhood of a million dollars to open up a new center. So in the first year, we usually achieve, again, 100% return. So in that million-dollar range for a new center once it's been open for 12 months. And it usually takes about 24 months to get a center fully ramped.

Okay. And then can you give us just a sense of the kind of difference between what the price point would be for just a simple fat, you know, uh, reduction and then maybe a fat transfer, you know, if they're just getting something pulled out of their legs, you know, what is that price point versus getting it transferred into another part of the body?

I could speak to that. This is Aaron Rollins. So in terms of pricing, um, It all depends on how many areas you want done and how much fat there is to be removed. And that really means OR time. The longer you're in a procedure room, the more it costs. I'd say about the average add-on cost for a fat transfer is about $6,000 right now. So you could get a fat transfer with one area, two areas, four areas. So that's why the other part of your question is hard to answer.

Mm-hmm. Yeah. And then one last one. Have you guys had any plans to start measuring some of the health outcomes of kind of post-procedure, you know, as far as lipid profile and other things like that?

Actually, yes. Thanks for asking that question. We are interested in doing that and working on a study design. I strongly believe that I'm excited about it and I'm looking forward to seeing what hemoglobin A1C, triglycerides, and the general lipid profile will show probably three months after, but we're still looking at study designs. It's something I'm very enthused about.

All right, great. Thank you. Thanks.

Thank you. Thank you. Our next question comes from the line of Josh Raskin with Nephron Research. Please proceed with your question.

Hi, thanks. Good morning. Just one more quick follow up on the pricing, you know, the same store revenue per case of 20%. And I hear a lot about sort of the mix of procedures and the number of procedures. But I'm curious if there's any geographic mix that goes on there if you're seeing, you know, for example, in Miami or Salt Lake, are there, you know, higher rates per procedure for the same procedure in certain areas that are going to drive any of that? And then it sounded like no need to take price increases. I'm just curious on the labor front, are you seeing any pressures there? Are there any contemplations of price increases just to keep up with costs if you are seeing any of those pressures?

Yeah, when it comes to pricing from a geographic standpoint, Josh, we don't have a significant amount of variability across our centers. Again, maybe certain markets might you know, see a different type of fat transfer procedure that tends to be more prevalent in that market. But again, our core business is fat removal. And so, and we don't have a significant variability between our centers. I mean, the rate that we charge generally or the rate that we're, you know, experiencing in Beverly Hills is very comparable to the rates, you know, we see in Charlotte, North Carolina. So we don't have a lot of variability there. across our markets. And then, Ron, do you want to speak to labor and those from the standpoint of clinical or actually, Dr. Rollins, why don't you speak to that? You can probably even talk about some around the physicians as well.

In terms of hiring our surgeons, I think we're doing an excellent job. continue to build our physician recruiting department, and we've added capacity in terms of physician training, and that's working out very well. We've also done a really good job with hiring nurses. Many people have asked us about, apparently there's a nursing shortage, but happy to say that nurses really like working for Aeroscope Technologies. because it's a much better schedule, much better and friendlier environment. People aren't sick and we pay well. So we're doing really well in the hiring.

Great. And then the second question I had was, you know, just around COVID and, you know, since you guys weren't public, Maybe you could just remind us how procedure counts are impacted by, you know, previous COVID waves. I heard your commentary that there's been no impact to date, you know, in this latest wave. I know it's, you know, super early. And I am curious if you're ever subject to any of these, you know, regulatory rules around elective procedures, you know, or, you know, the lack of an inpatient stay or, you know, no real capacity issues sort of, you know, makes that not particularly impactful for you.

I can answer some of the questions. In terms of what we experienced through COVID, we saw very, very few clinics actually get closed due to state regulations because there's no inpatient stay. And we just followed those state's regulations. But it wasn't really a major impact. I mean, we did have to close down. for almost three months. And as I think you can see from our numbers, that our volume increased rapidly after we were able to open. But it wasn't... There's no special state regulations that would hurt us or anything like that because not only are we done under local, so... It's not actually an operating room, but we just didn't see much in that regard. Dennis, is there anything you want to add?

Yeah, I would say just obviously we're still in the Delta variant. Obviously, we know the Delta variant has been with us for a number of months now, and we haven't experienced any challenges as it relates to that variant that came through. Obviously, Dr. Rollins spoke to when the entire country was shut down, for a couple of months last year in 2020, obviously we had to shut down. But, you know, thinking of the New York regulation that came out last week as it related to, you know, that was primarily a hospital that, you know, if there is an elective procedure that potentially could take up a bed, then they were going to potentially, you know, deny that. But since we're not anywhere in a healthcare environment, I mean, our facilities are Again, we tend to be in a high-end retail area. We're not part of the healthcare community as it relates to where we reside. And so, again, over the last, except for that first initial shutdown of the entire country, we haven't had any other areas or markets to where we've had to close or reduce services due to COVID.

That's perfect. Thanks.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Dr. Rollins for final remarks.

Thank you. I'd love to thank everybody for joining our first earnings call. We're really excited about the coming quarter and happy to announce last quarter's results. I look forward to speaking to everyone in the future. Thanks again.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.